Standard Life Sterling Fund

shaunrc

Hi Guys

Before my current employment as an IFA I worked for Standard Life as a tied adviser and I have a stakeholder pension with them which is part of their employees ( ex in my case) stakeholder, so I have some insight on both sides of the coin.

At the time I was recommending their products and investing in one the Sterling Fund was portrayed in a quite different light to what Standard Life are trying to say now. At this time it was the secure fund for if you expected a short term market drop. Frankly people within the company referred to it as a cash fund. In case I was confused by this I have checked this matter over the last 24 hours with some ex-colleagues who confirm my opinion. Although there is always some risk there is an element of degree and this is where I disagree with dunstonhs postings in that what appears to have happened is that the degree of risk changed and investors were not told about it.

It would appear that in the last year or so Standard Life has put the fund into much riskier investments. At what point is it reasonable for them to inform investors of this? I would contend that this fund is so fundamentally changed from what I and presumeably others believed when they invested in it that I and other policyholders should have been told.

The fund dropped by 1/2% last summer due to a revaluation of holdings backed by Lehman Bros. I enquired about this but at that time there was no managed cash fund and hence no alternative.

This current drop has another problem. As a daily priced unit linked fund surely the price should have been changing day by day as particular products/investments come up with problems. Why has it changed all in one day? This beggars belief in my view. Here again Standard Life have serious questions to answer as one cannot reasonably argue that they all fell on one day. If you think about it they are implying recent valuations have been inaccurate and implying their own prices have been misrepresentations. As a further issue they have treated this as similar to a Market Value Adjustment but this is not a with profits fund.

Also this is the fund that is used for lifestyling and is supposed to be a safer product. However what about people who have recently switched in due to lifestyling? This is hardly how it is supposed to work.

This has the feel that Standard Life have known there have been problems and have rushed out a managed cash fund and after a suitable delay have announced the problem to the wider public. I hope that my feeling is wrong but this has a shabby feel to it in the way that the definition of the fund has changed as highlighted by Perfect Choice above.

A sad day for what used to be a good company......

EdInvestor

whiteflag wrote: »

Ed can you just confirm that cash deposits held within a SIPP are better protected than in a providers cash fund?

If you invest via the SIPP in a specific account at a specific bank, then the money should be protected under the Govt guarantee, ie up to 50k for each separate account, assuming it's an onshore UK bank. There is some doubt over the position if you just hold large amounts of cash in the SIPP cash fund - as to whether there is just one account with one 50k limit in the SIPP provider's name, or a separate account for each SIPP client.You need to check with the provider.

Perfect_Choice

artha, the Pension One Sterling Fund did have the 5% drop on the 14th January, I saw it on the web site, as I monitor the price daily for Pension One (my fund) and my wife's stakeholder pension. Fortunately I moved out and into the Managed Cash Fund last October.

Not sure where you are getting your growth figure from, if you look at the Standard Life site and access the fund report by selecting the name, the 12 month discrete fund performance is only 0.7% after this drop which you can clearly see on the graph. Links I've used are below:

http://webfund6.financialexpress.net/clients/standardlife/fundFactsheet.aspx?type=retail&code=ST61

http://www.standardlife.co.uk/content/policy/sl_funds/PS4/prices.html

TMFTP

Looks like it's failing the FSA's "Treating Customers Fairly" approach on all sorts of levels:

- Not providing relevant information to customers,
- Marketing practices that could lead to unrealistic expectations, and
- Complex, unclear products, with associated risks not
properly identified

all look relevant.

whiteflag_3

dunstonh wrote: »

SL have a very small bank of advisers. .

117 according to the FSA register - is that very small?

If someone from SL told minsky that the Sterling fund was the lowest risk fund , they were wrong and are liable.

Where does minsky say they gave her literature and told her to make her own mind up?

whiteflag_3

EdInvestor wrote: »

If you invest via the SIPP in a specific account at a specific bank, then the money should be protected under the Govt guarantee, ie up to 50k for each separate account, assuming it's an onshore UK bank. There is some doubt over the position if you just hold large amounts of cash in the SIPP cash fund - as to whether there is just one account with one 50k limit in the SIPP provider's name, or a separate account for each SIPP client.You need to check with the provider.

would have been nice if you could have answered this

For example, what would be the position if you held £100K in a bank account within a SIPP and the bank went bust ( not inconceivable)
and a pension with £100K in a cash fund that folded?[/QUOTE

whiteflag_3

EdInvestor wrote: »

If you move to a SIPP you can invest cash in an actual bank account with the usual safeguards. But an ordinary pension will not usually offer this.

Come on ED tell the truth, you can get cash funds in pensions and they offer far better investor protection than cash in a SIPP


How can people rely on these forums if people like you post totally misleading information!

wonderman

I had money in this fund as well. When it dropped by a small amount I could not figure out why - then got the explanation about Lehmann Bros investment causing a small one off blip. Curiousity caused me to dig me a bit deeper and it turns out that most of the "floating rate notes" are actually "asset backed securities" - mortgages to you and me. And just where did the credit crunch start?
SL has now re-valued some of those asset backed securities. They must have de-valued them by about 10% to achieve an overall reduction of 5% - as they make up about 1/2 (eeeekkkkkk - it's a low risk cash fund remember!!) of the total fund.
To those who are asking on here if this is the end of the adjustments for this fund - I doubt it - my guess is that they will have to keep on devaluing the asset backed securities part of the fund - and they must have been using the income from the other investments over the last year to offset falling values.

ClaretHead

Last year I started work for a new company, and went into their Standard Life Group Personal Pension plan - I just opted for the default “Balanced Profile”, for the average investor.

I would imagine that a lot of people in company plans would do the same – assuming that the pension company would know what they are doing.

Here’s what the literature said about the balanced profile

---

How your investment will be managed within the Balanced Profile

As you get closer to your retirement we will help to protect your plan, as you requested. This table shows how we will do this

Years from
Retirement Managed Cautious Managed Potection Sterling

10 years 100
9 years 100
8 years 80 20
7 years 60 40
6 years 40 60
5 years 10 80 10
4 years 0 70 30
3 years 0 60 40
2 years 0 40 50 10
1 year 0 10 70 20
Retirement 0 0 75 25

---

So Standard Life automatically put investors’ money into the safe haven of the Sterling Fund to protect it just before retirement. And then they invest it in dodgy American securities.

Luckily I’m still over 10 years from retirement, but it looks like I would be making a big mistake to assume that their “Balanced” plan is sensible – if they put cash into defaulting mortgages!

artha

Perfect_Choice wrote: »

artha, the Pension One Sterling Fund did have the 5% drop on the 14th January, I saw it on the web site, as I monitor the price daily for Pension One (my fund) and my wife's stakeholder pension. Fortunately I moved out and into the Managed Cash Fund last October.

Not sure where you are getting your growth figure from, if you look at the Standard Life site and access the fund report by selecting the name, the 12 month discrete fund performance is only 0.7% after this drop which you can clearly see on the graph. Links I've used are below:

http://webfund6.financialexpress.net/clients/standardlife/fundFactsheet.aspx?type=retail&code=ST61

http://www.standardlife.co.uk/content/policy/sl_funds/PS4/prices.html

I didn't quote a growth figure but referred to the "slight gain" of 0.7% in the 12 months up to 31/12/2008 i.e before the 5% drop. I was querying the OPs figure of an 8% drop in fund value in the 12 months prior to the 5% drop i.e I wasn't sure if we were all talking about the same SL Sterling Fund. In my case the "Pension One Sterling Fund" as opposed to e.g " Life Sterling Fund " or "Pension Sterling Fund" etc